The Week in Review: July 21, 2025

Tariffs Begin to Bite

At first glance, June’s Consumer Price Index (CPI) was reassuring. The US Bureau of Labor Statistics reported that the CPI rose 0.3% in June as expected, while the core CPI, which excludes food and energy, rose a smaller-than-forecast 0.2%, per the Wall Street Journal.

On an annual basis, the closely followed core rate increased 2.9% in June vs. 2.8% in May.

However, if we dig through the report, we are beginning to see some impact from higher tariffs on imports.

Consumer goods less food, energy, and used cars—the everyday items you might buy online or at the store—rose 0.3% in June, the largest increase since February 2003.

Notably, new and used car prices fell, which helped muffle the rise in consumer goods. According to Bloomberg, consumer goods excluding all autos, food, and energy climbed 0.55% in June, the biggest monthly advance since November 2021.

Some of the increases are highlighted below.

Although a broad-based increase in inflation has not yet materialized, tariff-related costs are beginning to surface at the retail level.

 Bottom line

June marks the first clear indication that tariffs are beginning to noticeably show up in the CPI. As such, it's reasonable to expect further increases to emerge in the coming months. So far, however, the impact appears concentrated to a limited set of goods.

Still, it is unclear who will ultimately shoulder the burden of rising costs.

As Fed Chief Jay Powell opined last month, “There's the manufacturer, exporter, importer, retailer, and consumer. And each one of those is going to be trying not to be the one to pay for the tariff. But together they will all pay. Or maybe one party will pay it all. 

“But that process is very hard to predict. And we haven't been through a situation like this.”

Moreover, it's unclear whether this will be a brief price spike in a few select items, the beginning of a more sustained increase that could trigger a secondary wave of inflation, or whether non-tariffed services might mask or help offset increases we could see elsewhere in the CPI.

Investors generally dismissed early signs of tariff-related inflation. Still, trade tensions remain a point of contention, as markets continue to wrestle with the implications of potential levies.

For now, those concerns appear to be sidelined, with investors focused on the expanding economy, AI, and Q2 earnings.

Market Summary

Please do not hesitate to contact me with any questions or concerns. 

I hope you have a great week!

Warmest Regards,

Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management

Sources: ConstitutionCenter.org, ConstitutionFacts.com, Military.com, CNN

Stordahl Capital Management, Inc is a Registered Investment Adviser. This commentary is solely for informational purposes and reflects the personal opinions, viewpoints, and analyses of Stordahl Capital Management, Inc. and should not be regarded as a description of advisory services or performance returns of any SCM Clients. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Advisory services are only offered to clients or prospective clients where Stordahl Capital Management and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Stordahl Capital Management unless a client service agreement is in place. Stordahl Capital Management, Inc provides links for your convenience to websites produced by other providers or industry-related material. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third-party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third-party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax, or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

1. The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
2. The NASDAQ Composite is an unmanaged index of companies which cannot be invested into directly. Past performance does not guarantee future results.
3. The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
4. The Global Dow is an unmanaged index composed of stocks of 150 top companies. It cannot be invested into directly. Past performance does not guarantee future results.
5. CME Group front-month contract; Prices can and do vary; past performance does not guarantee future results.
6. CME Group continuous contract; Prices can and do vary; past performance does not guarantee future results.